Czech Skoda plans to double sales in next decade
Skoda Auto AS will “at least” double global sales through 2020 as the Czech carmaker plans to expand operations in Russia, India and China, Chief Executive Officer Winfried Vahland said.
The division of Volkswagen AG will “noticeably expand” its business in the three nations, where sales of passenger cars and light commercial vehicles may surge to 30 million units by 2020 from 17 million last year, Vahland said today at an automotive conference in Berlin.
“Skoda is facing a new advance to its international growth,” said Vahland, who took the helm at Mlada Boleslav- based Skoda on Sept. 1.
Volkswagen is seeking to reposition Skoda under Vahland and reinforce the carmaker’s traditional focus on Eastern Europe and Asia. Europe’s largest carmaker aims to achieve sales of 10 million units by 2015, three years ahead of its previous plan, as VW tries to pass Toyota Motor Corp. as the world’s biggest automaker, a person with direct knowledge of the matter said Oct. 21.
Sales in non-European countries, mainly China and Russia, make up 30 percent of Skoda’s total sales and the target is to raise their share to 50 percent over the period, Skoda said.
Overall 2009 sales rose 1.4 percent to 684,226 cars, with sales in China more than doubling to 122,556 units. Revenues fell 6.2 percent to 188 billion crowns ($10.7 billion).
Skoda expects sales and operating results to “significantly” improve this year, the company said Oct. 27. The carmaker sold 569,000 vehicles, including Superb station- wagon and Octavia hatchback models, in the first nine months, a 13 percent gain from the same period a year earlier, while operating profit almost doubled to 314 million euros ($441 million) from 162 million euros.
SKODA IS VW GROUP’S ENTRY-LEVEL BRAND BUT EATING IN VW’S SALES.
Skoda is the VW Group’s entry-level brand, but VW management believes Skoda has moved too close to its main brand and is luring customers away from VW. The technically similar VW models cost more than a comparable Skoda.
VW chief Martin Winterkorn says the company will reduce Skoda production costs by cutting back on equipment levels.”We cannot have a [Skoda] Fabia with a higher-value instrument panel then the [VW] Polo,” he said at the Paris motor show.
Skoda, meanwhile, is not happy with its parent’s plan to reposition the brand beneath VW in Europe. Skoda dealers don’t agree that the brand attracts customers who would otherwise buy a VW.
Reducing the level of standard equipment on the Skoda is hurting customer satisfaction as well as making them angry, said Thomas Peckruhn, chairman of the Skoda dealer association in Europe
“We conquer customers from French brands such as Peugeot and Renault, including Dacia,” Peckruhn said. He said Skoda will lose sales if its cars are decontented. “It is impossible to believe that customers will not notice something like that.”
“We’re focusing on our competitors, the Koreans,” the CEO said. “That’s where we want to score.”
Source: bloomberg and nzherald
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